Investment banking marketing is a unique challenge. Regardless of if you’re representing a startup in a private placement, or a corporate finance team looking for buyout targets, you have multiple audiences that you need to stay in front of and build relationships with. And these audiences aren’t just financial institutions and management teams but also those that might refer you to them.
As if those challenges weren’t enough, you might also have multiple lines of business to spread the word about – capital raising, mergers and acquisitions advisory, valuation services, capital markets and IPOs, and equity research. And odds are, you’re doing this without many (or any) dedicated marketers on staff. Instead, a few managing directors and vice presidents are likely moonlighting as the digital marketing team to prepare a buyers list for one transaction and put a data room for due diligence for another.
Despite those challenges, the investment banking market has only become more competitive – the number of investment banks in the U.S. has gone up nearly 20% since 2015, according to the Bureau of Labor Statistics.
Nonetheless, investment bankers can build and execute an excellent investment banking marketing strategy, even if you don’t have the resources or the reputation of Goldman Sachs.
Want to learn how? Read on!
Step #1: Determine Your Focus
All great strategy (including marketing) starts with determining where you’d like to play – what market segments, client types, and services that you see as core to your firm. Competing effectively against bulge-bracket investment banks becomes exponentially more challenging if you’re trying to beat them across every dimension.
Instead, the boutique and middle-market investment banks that beat out Wall Street banks win by specializing. Sophisticated asset management firms that look for advisory services aren’t interested in platitudes – but in the network and hard-won knowledge that comes with domain expertise.
Boutique firms have the unique opportunity to offer customized guidance and creative solutions to complex problems clients value. Moreover, having intimate knowledge of your industry positions you as an authority and trusted advisor, making it easier to be ‘known’ for something, win clients in that space, and build additional expertise.
There are many dimensions you can choose to specialize in. Some examples:
- Industry (e.g., healthcare, financial services, real estate)
- Business model (e.g, eCommerce)
- Acquirer or seller type (corporate finance or development, private equity firm)
- Company size (by revenue, EBITDA, number of employees)
- Transaction type (e.g., private placement, IPO)
- Management team legacy (e.g., family-owned)
To determine which areas are best suited for your investment banking marketing strategy, you’ll want to determine which segments are most attractive:
- Which categories are the largest? Which are growing most quickly (or have the potential to do so in the future?)
- Which are under-tapped, and require the least competitive infighting to enable you to establish a foothold and reputation?
- Where do your internal strengths lie? Where does your network, prior transaction history, and work experience give you an inherent advantage?
Step #2: Develop your Positioning and Messaging
Once you’ve identified where you’d like to focus, the next step is to package your strengths in a way your target audiences can easily digest and remember.
Put another way – now that you’ve identified where the sum total of your experiences and network gives you an advantage, how does that advantage translate into value for your clients and partners?
For instance, a deeper network in a particular industry (e.g., biotechnology) means that you’ve already established relationships with the relevant buyers (corporate development teams, private equity firms), and likely know more of them. As a result, you can help a management team run the most extensive search, more efficiently hone in the best acquirers for them, get those acquirers to engage quickly, and ultimately find the best long-term fit (at a great valuation).
Or if you’ve spent your career in the commercial banking sector, you’re going to understand the intricacies of those businesses (their underwriting practices, regulatory constraints, etc.) at a deeper level than others. That leads to highly relevant guidance that helps your clients avoid an unforeseen mistake in one of the most pressure-filled transactions of their lives.
As you identify how your unique advantages translate into value for your clients, you’ll want to codify that into a consistent set of talking points. Done well, this enables the team to have a consistent message across the tactics you use in the market – from your website to 1-on-1 interactions – to reinforce who you are and why you’re different.
Step #3: Deploy the Right Tactics
Once you know the universe you’re targeting and what you’d like to say to them, you can work backward to identify the channels that are likely to be most effective in reaching them. For instance, buying billboards in New York to support an industrials-focused middle-market M&A strategy is likely to yield poor results.
Below is a list of tactics we’ve seen used to great effect by investment banks in the market:
At the end of the day, investment banking is a relationship business. This dynamic is natural – when you’re dealing with one of the most consequential transactions of your life, you want to trust the team that’s guiding you through it. Referrals are a form of transferred trust – the person giving you a referral signals to the other party that they trust you and believe you are competent.
As a result, referrals are an incredibly powerful part of a marketing strategy. To drive these, you’ll want to map out the common sources you can get these referrals from:
- Investors (private equity funds, growth equity / VC funds, even hedge funds)
- Service providers (lawyers, accountants, wealth management, and other financial services professionals)
- Existing clients (management teams and entrepreneurs who likely know other companies)
- Community conveners (event organizers for spaces that overlap with your areas of focus)
With that mapping completed, you can determine i) how best to get in front of those people (e.g., LinkedIn connections, relationship intelligence software) and ii) how regularly to build on those relationships, such that you’re the first one they call when there’s an opportunity they’re aware of (e.g., an upcoming IPO). We’ve got a bunch of additional tips to drive deals from referrals here.
Conferences and Events
Most segments and industries have regularly scheduled conferences and events – and for your target area of focus, they can be an ideal place to meet executives. Simply showing up and beginning conversations with other attendees is a strong starting point.
But you can drive even more ROI those events with some advanced preparation – some examples:
- Reaching out to the attendees to see if there are panels you can moderate, be a part of, or even sessions that you create and pitch yourself
- Sponsoring part or all of the event in exchange for broader recognition and awareness with the attendees
- Getting the attendee list ahead of time, doing some research about the companies you’d like to meet (using a combination of Google searches and more specialized databases like Pitchbook), and setting up one-on-one meetings with executives ahead of time.
- Throwing private events or dinners for some of the attendees you really want to get to know who will be in town for the event.
As you specialize, you’ll uncover information that is novel to others (especially those who aren’t exposed as many transactions as you are). That information can be an edge in specific deals – but can also be shared with your audience as a way of demonstrating your depth of knowledge in the space.
Each team member likely has significant latent knowledge about their industry, how it works, and trends amongst the market players that are a potential goldmine for others. One way to generate these topics is to take the common topics a potential client asks you, or common discussion topics amongst market participants, and use that as a basis for content:
- Common valuation methods and transaction multiples in the space
- Key areas of focus for the most active acquirers and what makes those spaces compelling
- What key thresholds (financial, operational) unlock meaningful increases in value for sellers
- And many more than these!
Those insights can also be packaged in many ways – email newsletters, research papers, equity research pieces, presentations, social media posts, or even podcast interviews. Valuable content also makes the cold outreach you do to potential clients far more credible.
Executed well, this can become a meaningful form of inbound client generation – having clients contact them to sell or raise capital. This is the dream – generally the exclusive benefit of being a bulge-bracket firm but is also attainable for middle-market banks. Not only this, but it also gives you a simple way to create value for those in your firm’s network – and can be included as a part of a regular stream of touchpoints to keep key contacts engaged.
The tactics we’ve described above are great methods to generate awareness and establish initial contact. But what happens when you meet someone where there’s not an immediate opportunity to work together?
For many, that person’s name (at best) lands in an excel spreadsheet, never to be engaged again. Instead, you’ll want to actively work to build the relationship and create value for them. Doing so without expectation of direct return may result in referrals or a direct engagement down the line.
There are several ways you can achieve this:
- Meeting with the prospect to offer acquisition ideas and areas they’d like to expand into
- Offering market updates within the capital and M&A markets
- Having casual meetings to catch up on the company and future plans
- Acting as an on-call consultant to answer questions
The Bottom Line
A great marketing strategy is no longer a nice-to-have for investment banking firms. Across all the different business lines – mergers and acquisitions, IPO underwriting, and beyond – increasing competition for deals requires each firm to have an edge. But even if you’re not a bulge-bracket Wall Street bank, you can win clients with a thoughtful marketing strategy.
This is a lot easier to do when you have the right tools at your disposal to underpin your relationship-building and marketing efforts. At 4Degrees, we offer relationship and deal management, designed specifically for investment banking.